Date
20 October 2017
Besides paying a record US$975 million fine, US chipmaker Qualcomm has also agreed to cut royalties on  patents used in China. Photo: Reuters
Besides paying a record US$975 million fine, US chipmaker Qualcomm has also agreed to cut royalties on patents used in China. Photo: Reuters

Qualcomm pays record fine to settle China antitrust row

United States chipmaker Qualcomm Inc. will pay a fine of US$975 million, the largest in China’s corporate history, ending a 14-month government investigation into anti-competitive practices.

The company also agreed to cut its royalties on patents used in China, likely helping Chinese smartphone makers such as Xiaomi Technology Co. Ltd. and Huawei Technologies Co. Ltd.

China’s expanding high-speed 4G network is driving demand for smartphones with leading-edge technology.

But Qualcomm’s opportunities have been clouded by the antitrust investigation which has also contributed to troubles collecting royalties from device makers.

In a statement Monday, Qualcomm said it would not contest the findings by the National Development and Reform Commission (NDRC) that it violated an antitrust law.

“We fully respect their authority but we don’t believe it’s likely that other agencies will necessarily meet similar conclusions,” Qualcomm president Derek Aberle said. 

The company cut its full-year earnings estimate because of the fine which it would cost it about 58 US cents per share.

Discussions in Beijing over one of the most contentious cases under China’s 2008 anti-monopoly law has intensified in recent weeks.

On Friday, Qualcomm senior executives held a meeting NDRC officials.

Under the terms of the agreement, Qualcomm will offer licenses to its 3G and 4G essential Chinese patents, widely used by Chinese device makers, separately from other patents.

For companies opting for the new agreement, which applies to phones sold for use in China, Qualcomm will calculate royalties based on 65 percent of the selling price of phones, not on the whole price.

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CG/RA

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